Would you shop at a car dealership that the U.S. Army officially forbade its military men and women from visiting? Would you buy a vehicle from a salesperson that has a history of calling the police on his customers, and lying to them about their warranty?
No? Neither would I, and neither would a lot of people, which is why Arizona dealer Rick Johnston (who runs Wildcat Mitsubishi in Tuscon and Ideal Automotive in Sierra Vista, Arizona) is in so much hot water right now.
For the time being Rick Johnston, along with his sons Beau and Heath, owns and operates two auto dealerships in Arizona. Yet in light of recent allegations directed at the Johnston family, it’s likely that the Johnston’s days or running car dealerships are running out. Just last month Fort Huachuca Army Base officially banned all of their military men and women from buying a car at either one of the Johnston’s dealerships. Army spokesperson Tanja Linton said, “We were concerned that our service members were being taken advantage of.”
Victims of illegal and/or aggressive dealership sales tactics are often reluctant to share their experiences, but U.S. Army soldier James Tuman has been speaking openly about his experiences.
Tuman had a motorcycle and SUV that he traded in for a used car from Johnston’s Ideal Automotive. After driving the car Tuman quickly learned it had several mechanical problems. When he tried to return the car, Ideal Automotive said that they would not accept his return or provide a refund. Instead, they offered to take back the car and sell him a different one. Tuman, unsatisfied, said he was going to make an official complaint instead. Ideal Automotive responded with threats, saying that they would declare the car “repossessed” if he didn’t fulfill his obligation. Since a repossession could affect Tuman’s security clearance (the military has rules forbidding soldiers with repossessions to hold high security clearance), Tuman was forced to accept the dealership’s mistreatment or jeopardize his career.
Tuman is not alone. Since 2005, the Arizona Business Bureau has reviewed 30 complaints against the parent company of these two dealerships, Johnston Shield, Inc.
The complaints against these dealerships range from refusing to return a deposit, selling trade-ins before deals were finalized, and incorrectly claiming that parts were covered under warranty. According to the Arizona Star there are also claims that the Johnstons sold damaged vehicles and even called the police on customers for what appear to be unfair reasons.
It’s not just the issues with the customers that have the Johnston’s under fire. In July the company filed bankruptcy stating the company owed more the $2.1 million to unsecured creditors including more than $1 million to the IRS and about $283,000 to the Arizona Department of Revenue for sales tax and payroll tax.
Other indiscretions include making finance deals without a license for two years. Although they now have a valid license, the dealership could face serious fines of up to $5,000 a day for each violation. The dealership is also getting heat from the Transportation Department for continuing to issue temporary license plates. There was an order in place to stop them from doing so because the dealer issued plates with the wrong VINs on five separate occasions. This violation will likely mean more fines.
With the mounting expenses, reduced customer base, and bad publicity, the future for Johnston Shields, Inc. is not so bright.
Just a quick search on the Web will turn up a variety of not so savory reviews. Including this one from MerchantCircle.com: “If I could give this business negative stars I would. This company (ran by ex-cons) have done numerous customers wrong and have violated a variety of laws in the process.”
To be fair there are positive reviews on other sites like Edumunds.com. I’m not about to say that everyone has had a bad experience at the Johnston’s dealerships, but from what I can tell most of those that are speaking up don’t have much nice to say.
The lesson? When car shopping, take the time to read online reviews of your local dealers. While every dealership is going to have negative reviews (it’s the nature of the business), watch out for dealerships with an inordinate amount of negative complaints.